India’s finance minister Piyush Goel has blamed international factors for the current decline in the rupee’s value against the dollar, and said India’s financial situation is much improved from the UPA days.

“All our macro economic indicators are strong,” Goyal said.

“But on the international scene, there have been announcements on oil and on Iran, and interest rates are hardening in the US. Some dollars are heading back to the US as the interest rates and yields are up (in the US), ” he said.

The rupee had crossed the 69 mark against the dollar yesterday in the context of a global weakening of emerging market currencies against the US currency.

Other currencies such as the Chinese yuan, Brazilian real, Philippine peso and Indonesian rupiah too have fallen against the dollar in recent months.

The rupee has fallen by 3% against the dollar in two years, while the Philippine peso fell by 16%, the Brazilian real by 9%, the rupiah by 5% and the yuan by 1%.

The reactions are attributed to the return of cash from these countries back to the US in anticipation of higher interest rates in the country. The US Federal Reserve is on a path to normalize interest rates from zero to the norm of about 5% over the next 2-3 years. However, many believe that the effort will push the US in to a recession again, and force the Fed to reverse course soon.

Goyal disputed the assertion that the rupee is at its all-time low against the dollar, claiming that it had gone below the current level in 2013, when the US Federal Reserve had first indicated that it was going to reverse its quantitative easing program.

Goyal said the government of India will not resort to any ‘knee-jerk reactions’, as an ‘organized market’ requires an organized response.

The FM pointed out that India’s payments situation is considerably improved, compared to what it was when the previous UPA government stepped down four years ago.

“Our foreign exchange reserves today is at $425 bln compared to $304 bln four years ago. There has been a 40% growth,” Goyal said.

Similarly, he said, current account deficit — or the shortfall in the amount the country spends to buy goods and services from outside versus what it earns — has fallen to 1.9% of gross domestic product last year from 4.8% in 2012-13.

He also said India has paid back the $32 bln worth of bonds issued by the government in 2013 to prop up the rupee.